According to local media sources, post the introduction of Kazakhstan’s Government’s revised regulation controlling the fiscal cost of mining cryptocurrency collected around 3.07 billion tenges which are about $7 million in tax payments from crypto mining businesses in 2022, Reportedly, amidst the restriction of mining operations, cryptocurrency miners spent millions of dollars in energy costs last year.
Kazakhstan is among the world’s top Bitcoin mining locations. As per the data of the Cambridge Centre for Alternative Finance, this Central Asian country generated 13.22% of the overall Bitcoin hash rate in January 2022, with the United States and China trailing at 37.84% and the Chinese at 21.11% respectively.
Last year the country introduced taxes for digital mining based on its power use. As reported by Cointelegraph, the regulation came into effect as a result of growing national dissatisfaction with crypto miners’ underutilized use of the national power infrastructure. As a result of this modified legislation, the country witnessed a legal road for greater adoption in the face of tighter rules throughout the world.
During the bull market in 2021, the multinational mining operators migrated to Kazakhstan, which led to growing complications between the country and miners. Reportedly, more than 87,849 rigs were delivered to the area by November 2021 as a result of China’s mining crackdown.
As a result, the government announced its plans to implement new crypto legislation in order for combating tax evasion and illegal commercial activity. This would require government clearance for secured digital asset issuers, while it would compel miners to sell at least 75% of their cryptocurrency earnings through regulated exchanges. The change is intended to decrease tax avoidance.